8 Major Defects of the Revealed Preference Theory
The following points highlight the eight major defects of the revealed preference theory. The defects are: 1. Neglects Indifference 2. Not Possible to Separate Substitution Effect 3. Excludes Giffen Paradox 4. Consumer does not choose only one Combination 5. Choice does not reveal Preference 6. Fails to derive Market Demand Curve 7. Not Valid for Game Theory 8. Fails in [...]